Hu Tells Leaders China Growth Will Help World Economy Chinese President Hu Jintao told world leaders that his country "has taken an active part in the international cooperation to deal with the financial crisis'' by providing a "$586 billion economic stimulus,focused on building low-rent housing,roads,railways and airports.The package also allows tax deductions for fixed assets such as machinery to stimulate investment.Farmers will also benefit from more subsidies."
Hu stated that "China is in itself an important contribution to international financial stability and world economic growth.''
China wants to increase investment because this change will

Question

Quizplus · Accepted Answer

Increasing investment in physical capital (such as low-rent housing, roads, railways, and airports) will lead to an increase in productivity and economic growth. This will help to stimulate employment and increase incomes, which will also contribute to overall economic growth. Increasing human capital or the supply of labor, or not increasing the real wage rate, are not directly related to increasing investment.